2020

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The Budgetary
System
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Budget Process in the National Government
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THE BUDGET CYCLE
BUDGET
CYCLE
2020

The Four Phases of the Budget Cycle

T Budget Preparation
H
E
Budget Legislation
B
U
D Budget Execution
G
E
T Budget Accountability
C
Y
C
L GOVERNMENT BUDGETING IS IMPORTANT BECAUSE IT ENABLES THE GOVERNMENT TO PLAN AND MANAGE ITS FINANCIAL
E RESOURCES TO SUPPORT THE IMPLEMENTATION OF VARIOUS PROGRAMS AND PROJECTS THAT BEST PROMOTE THE
DEVELOPMENT OF THE COUNTRY. THROUGH THE BUDGET, THE GOVERNMENT CAN PRIORITIZE AND PUT INTO ACTION ITS
PLANS, PROGRAMS AND POLICIES WITHIN THE CONSTRAINTS OF ITS FINANCIAL CAPABILITY.
05
 BUDGET
PREPARATION
2020
THIS STARTS WITH THE BUDGET CALL AND ENDS WITH THE PRESIDENT’S SUBMISSION OF THE PROPOSED BUDGET TO
CONGRESS. DBCC SETS PARAMETERS BUDGET CALL STAKEHOLDERS CONSULTATION AGENCY BUDGET PROPOSAL S
TECHNICAL BUDGET HEARINGS EXECUTIVE REVIEW CONSOLIDATION, VALIDATION & CONFIRMATION PRESENTATION TO
B PRESIDENT & CABINET THE PRESIDENT’S BUDGET
U
D
G
E
T
• WHAT IS THE BUDGET CALL?
P • WHAT IS STAKEHOLDER ENGAGEMENT?
R • WHAT IS “BOTTOM-UP” BUDGETING?
E
P • WHAT ARE TECHNICAL BUDGET HEARINGS?
A • WHAT IS THE EXECUTIVE REVIEW?
R
• WHAT IS CONSOLIDATION, VALIDATION, AND CONFIRMATION?
A
T • WHAT IS A PRESENTATION TO PRESIDENT AND CABINET?
I • WHAT IS THE PRESIDENT’S BUDGET?
O
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2020

B
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D
G
E
T BUDGET CALL is defined as the budget framework;
P sets economic and fiscal targets; prescribe the priority
R thrusts and budget levels; and spells out the guidelines
E
P
and procedures, technical instructions and the timetable
A for budget preparation.
R
A
T
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N BUDGET CALL
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2020

B • STAKEHOLDER ENGAGEMENT is the practice of interacting

U with and influencing project stakeholders to the overall benefit of
D
the project and its advocates. The successful completion of a
G
E project usually depends on how the stakeholders view it.
T
• Their requirements, expectations, perceptions, personal agendas
P
R
and concerns will influence the project, shape what success looks
E like, and impact the outcomes that can be achieved. Successful
P stakeholder engagement is therefore a vital requirement for
A
professional project management.
R
A
T
STAKEHOLDER
I
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ENGAGEMENT
N

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2020

B
U
D
G
E BOTTOM-UP BUDGETING is when all the
T
departments or sections of a company create a
P list of all their anticipated expenses and then
R
E each department's list is totaled up to create an
P
A overall budget.
R
A
T BOTTOM-UP
I
O BUDGETING
N

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2020

B
U
D
G
TECHNICAL BUDGET HEARINGS are conducted after
E departments and agencies submit their Agency Budget
T Proposals to the DBM. Here, agencies defend their proposed
P budgets before a technical panel of DBM, based on
R performance indicators on output targets and absorptive
E
capacity. DBM bureaus then review the agency proposals and
P
A prepare recommendations.
R
A
T TECHNICAL BUDGET
I HEARINGS
O
N

09
2020

B
U • The recommendations are presented before an
D Executive Review Board which is composed of the
G
E DBM Secretary and senior officials.
T • Deliberations here entails a careful prioritization of
P programs and corresponding support, vis-a vis the
R priority agenda of the national government.
E
P
Implementation issues are also discussed and
A resolved.
R
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I
O EXECUTIVE REVIEW
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2020

B
U
DBM then consolidate the recommended agency budgets and
D
G recommendations into a National Expenditure Program and a
E Budget of Expenditures and Sources of Financing (BESF). As
T
part of the consolidating process, the deliberations by the
P DBCC determine the agency and sectoral allocation of the
R approved total expenditure ceiling, in line with the
E
macroeconomic and fiscal program. Heads of major
P
A departments are invited to this meeting.
R
A
T
CONSOLIDATION,
I VALIDATION AND
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CONFIRMATIO

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2020

B
U
D
G The proposed budget is presented by DBM, together with
E
T
the DBCC, to the President and Cabinet for further
refinements of prioritization. After the President and
P
Cabinet approve the proposed National Expenditure Plan,
R
E the DBM prepares and finalizes the budget documents to
P be submitted to Congress.
A
R
A
T
PRESENTATION TO THE
I PRESIDENT AND THE
O
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CABINET

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2020

B
U
D
G • The budget preparations phase ends with the
E
T submission of the proposed national budget –the
“President’s Budget”-to Congress.
P • The President’s Budget consist of the following
R
E documents, which help legislators analyze the contents
P of the proposed budget:
A
R
A
T
THE PRESIDENT'S BUDGET
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2020 President’s Budget Message (PBM)-This is where the President explains the policy framework
and priorities in the budget.

B Budget of Expenditures and Sources of Financing (BESF)-Mandated by the Constitution, this

U contains the macroeconomic assumptions, public sector context (including overviews of LGU and
D GOCC financial positions), breakdown of the expenditures and funding sources for the fiscal year
G and the two previous years.
E
T National Expenditure Program (NEP)-This contains the details of spending for each department
and agency by program, activity or project, and is submitted in the form of a proposed General
P
Appropriations Act.
R
E
P Details of Selected Programs and Projects-This contains a more detailed disaggregation of key
A programs, projects and activities in the NEP, especially those in line with the national
R THE PRESIDENT'S BUDGET government’s development plan.
A
T Staffing Summary-This contains a summary of the staffing complement of each department and
I agency, including number of positions and amounts allocated for the same.
O
N

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 BUDGET
LEGISLATION
2020
ALTERNATIVELY CALLED "BUDGET AUTHORIZATION PHASE" THIS STARTS UPON THE HOUSE SPEAKER'S RECEIPT OF THE
PRESIDENT'S BUDGET AND ENDS WITH THE PRESIDENT'S ENACTMENT OF THE GENERAL APPROPRIATIONS ACT.

B
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E
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• WHAT ARE HOUSE DELIBERATIONS?
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• WHAT ARE SENATE DELIBERATIONS?
G • WHAT ARE BICAMERAL DELIBERATIONS?
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S • WHAT IS RATIFICATION AND ENROLLMENT?
L • WHAT IS THE VETO MESSAGE?
A
T • WHAT IS ENACTMENT?
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2020

The House of Representatives, in plenary, assigns the President’s Budget to the

House Appropriations Committee. The Committee and its Sub-Committees then
B schedule and conduct hearings on the budgets of the departments and agencies
U
and scrutinize their respective programs and projects. It then crafts the General
D
Appropriations Bill (GAB).
G
E
T

• First Reading - The President's Budget is assigned to the House Appropriations

L
E Committee.
G • Second Reading - The Committee and its Sub-Committees schedule and
I conduct hearings on the budgets of the departments and agencies, scrutunize
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their respective programs and projects, then crafts the General Appropriations
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A Bill (GAB)
T HOUSE DELIBERATIONS • Third Reading - The GAB is sponsored, presented and defended by the
I appropriations committee and sub-committee chairmen.
O • The GAB that approved on the second and third reading will transmit to the
N
senate.

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2020

B
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• The Senate Conducts its own committee hearings to submit its
D proposed amendments and plenary deliberations on the GAB.
G
E
• Budget Deliberations in the Senate formally starts after the
T House of Representatives transmits the GAB for expediency.
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• The Senate Finance Committee and Sub-Committees usually
E start hearings on the GAB even as house deliberations are
G
I ongoing.
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B
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D After the House and the Senate approve their versions of
G
E
the GAB, they each form a panel of lawmakers that will
T constitute the Bicameral Conference Committee or
L Bicam. Bicameral Conference Committee will produced
E a harmonized version of the GAB by discussing the
G
I conflicting provisions of the House and Senate versions.
S
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A
T BICAMERAL
I DELIBERATION
O
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2020

B
U
D
G
E
The Harmonized or “Bicam” version of the GAB is
T
then submitted back to both Houses, which then
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vote to ratify the final GAB. Both Houses then
E
G submit or “enroll” the ratified
I
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GAB to the President.
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A
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RATIFICATION AND
I ENROLLMENT
O
N

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2020

B
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The President and DBM then review the GAB and
D prepare a Veto Message, where budget items subjected
G
E to direct veto or conditional implementation are
T identified, and where general observations are made.
L Under the Constitution, the GAB is the only legislative
E measure where the President can impose a line-veto (in
G
I all other cases, a law is either approved or vetoed in
S full).
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T THE VETO MESSAGE
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B
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Budget legislation ends when the President signs the
D GAA into law. If GAA (General Appropriations Act) is
G
E not enacted before the fiscal year starts, the previous
T year's GAA is automatically reenacted. This means that
L agency budgets for programs, activities and projects
E remain the same. Funding for programs or projects that
G
I have already been terminated is realigned for other
S expenditures.
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ENACTMENT
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 BUDGET
EXECUTION
2020
THIS IS WHERE THE PEOPLE'S MONEY ACTUALLY SPENT. AS SOON AS THE GAA IS ENACTED, THE GOVERNMENT CAN
IMPLEMENT ITS PRIORITY PROGRAMS AND PROJECTS.

B
U
D • WHAT ARE THE RELEASE GUIDELINES AND PROGRAMS?
G
• WHAT ARE BUDGET EXECUTION DOCUMENTS?
E
T • WHAT IS ALLOTMENT AND CASH RELEASE PROGRAMMING?
• WHAT IS ALLOTMENT RELEASE?
E
X • WHAT ARE INCURRING OBLIGATIONS?
E • WHAT ARE CASH ALLOCATIONS?
C
• WHAT IS DISBURSEMENT?
U
T
I
O
N

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B
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D
G
The budget execution phase begins with DBM’s
E issuance of guidelines on the release and utilization of
T
funds. Agencies are required to prepare their Annual
E Procurement Plans and other bid documents before the
X
E new fiscal year starts.
C
U
T
RELEASE GUIDELINES AND
I PROGRAMS
O
N

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2020

B
U Agencies submit Budget Execution Documents (BEDs)
D
G to outline their financial plans and performance targets
E for the year. The DBM consolidates these plans into the
T
budget program, which breaks down the allotment and
E cash releases for each month of the year.
X
E
C
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T
BUDGET EXECUTION
I DOCUMENTS
O
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2020

B
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D
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Allotment Release Program (ARP) is made to set a
E limit for allotments issued to an agency and Cash
T
Release Program (CRP) is also formulated alongside to
E set a guide for disbursement levels for the year and for
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E every month.
C
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T ALLOTMENT AND CASH
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RELEASE PROGRAMMING
O
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B The DBM issues allotments to agencies to authorize

U
D
the latter to incur obligations. With the GAA-as-
G Release Document, the enacted Budget itself serves
E
T
as the allotment release for all budget items except
those contained in a negative list that are issued the
E
X Special Allotment Release Orders (SAROs) after
E agencies comply with the documentary
C
U requirements.
T ALLOTMENT RELEASE
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B Agencies incur liabilities that th national

U
D
government will pay for, as they implement
G programs, activities, and projects. Agencies incur
E
T
obligations when they hire new staff or enter into a
contract with suppliers of goods and services that
E
X are subject to a transparent and competitive
E procurement process.
C
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T INCURRING OBLIGATIONS
I
O
N

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B
U
D The DBM issues disbursement authorities, such as
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the Notice of Cash Allocation (NCA), to authorize
E
T an agency to pay the obligations it incurs. To ease
budget execution, the DBM issues comprehensive
E
X NCAs to cover the cash requirements of agencies for
E
C
the first semester.
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CASH ALLOCATION
T
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2020

• For the final step of the budget execution

phase, where government monies are actually
B
spent. The Modified Disbursement Scheme is
U
D mostly used, where disbursement of national
G
government agencies chargeable servicing
E
T banks, such as the land bank of the Philippines.
• The budget process, of course, does not end
E
X when government agencies spend public funds
E
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each and every peso must be accounted for to
U ensure that is used properly, contributing to the
T
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DISBURSEMENT achievement of socio-economic goals.
O
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 BUDGET
ACCOUNTABILITY
2020
THIS PHASE HAPPENS ALONGSIDE THE BUDGET EXCUTION PHASE THROUGH THE BUDGET ACCOUNTABILITY , THE DBM MONITORS
THE EFFICIENCY OF FUD UTILIZATION, ASSESSES AGENCY PERFORMANCE AND PROVIDES A VITAL BASIS FOR REFORMS AND NEW
B
POLICIES
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D
G
E
T • WHAT ARE THE PERFORMANCE TARGETS AND
A OUTCOMES?
C • WHAT ARE BUDGET ACCOUNTABILITY
C
O REPORTS(BARS) ?
U
N • WHAT DOES NO REPORT? NO RELEASE MEAN?
T
A
• WHAT DOES REVIEW OF AGENCY PERFORMANCE
B MEAN?
I
L • WHAT IS AN AUDIT?
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T
• WHAT IS THE PERFORMANCE-BASED INCENTIVE
Y
SYSTEM?
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B
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Budget accountability starts with the setting of targets that
T agencies are to be held accountable for. With the
A Performance-Informed Budget, the GAA now contains
C the targeted outcomes, outputs and performance
C
O indicators of each agency. These targets are also reflected
U in agencies’ BEDs (see “Budget Program” under Budget
N
T Execution), which effectively serve as the agencies’ plans
A PERFORMANCE TARGETS for the year
B
I AND OUTCOMES
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Y

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B
U
D
G
E
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A
Agencies submit Financial Accountability Reports on
C a monthly or quarterly basis, as required by the DBM
C
O and the COA. These reports are submitted online
U through the Unified Reporting System.
N
T
A
B BUDGET ACCOUNTABILITY
I REPORTS
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2020

The DBM will be withholds certain fund releases to

B
U agencies if these fail to submit their Budget
D Accountability Reports. In particular, these will be
G
E funds from the Miscellaneous Personnel Benefits
T Fund (MPBF) for compensation adjustments under
A the Salary Standardization Law, provisions for
C
unfilled positions and employee clothing allowances.
C
O • These funds to be withheld are only limited to
U
agencies’ MPBF allotments so that only the agencies
N NO REPORT, NO RELEASE
T are penalized and that the implementation of critical
A
B
programs and projects will not be disrupted. Errant
I and compliant agencies will also be posted online for
L
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public scrutiny.
T
Y

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B
U
D
G
E
T The DBM reviews the financial and physical
A
performance of agencies against their targets.
C Review mechanisms include: the ZBB, to evaluate
C
O the efficiency and effectiveness of programs; and
U the FTDUs, to closely monitor agencies’
N
T performance and address bottlenecks proactively.
A AGENCY PERFORMANCE
B
I REVIEW
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Y

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B
U
D The COA reviews the accounts of each agency to
G
E
ascertain if public funds are used properly,
T according to the law and standards, and with value-
A for-money. The COA produces audit reports for
C each agency; a whole-of-government Annual
C
O Financial Report; as well as Special Audit Reports.
U The DBM uses COA’s Audit Reports in
N
T confirming agency performance, determining
A budgetary levels for agencies, and addressing
B AUDIT issues in fund usage.
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B
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D
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T Performance-based incentive system is a system
A
that recognizes and gives reward to those
C government employees who has a good
C
O performance, and also it helps to improve the
U efficiency of service delivery across all
N
T government institutions.
A
B PERFORMANCE-BASED
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L INCENTIVE SYSTEM
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P
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B
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Public service must be more than
F
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doing a job efficiently and honestly. It
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C must be a complete dedication to the
people and to the nation.
A
L

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R Margaret Chase Smith
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2020
GROUP 5
P
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Meet The Team
B
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MARRON RAVEN
F BATOLINA
LEADER
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A
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D DEACON LAYE JOLO ABRENICA
M PERALTA GRAPHIC
I CONTENT CREATOR & ARTIST
N
EDITOR
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A
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I
O KEITH MADRID PRINCESS MAE
CONTENT
N IAN TOLEDANES MEJARES
RESEARCHER CONTENT
09 CONTENT
RESEARCHER RESEARCHER
2020

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THANK YOU!
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